Financial Plan

Financial issues to consider within your strategic plan

A part of business plan requires you to work on your estimated cash outlay. Design your own cash flow forecast on excel spreadsheet incorporating income and expenses on monthly bases for next 12 month. Try to estimate cash funding requirements for your business.

Pre-commencement costs

You will need to spend the following before you start earning any income

• Legal costs related to establishing your legal entities

• Business registrations

• Initial stocks

• Stationery and printing cost

• Rent paid in advance & related costs

• Office or shop fitout cost

• Telephone & internet connection charges

• Advertising cost

Initial operating cost

These are typical operating costs and will show up periodically. They include rent, advertising costs, phone bills, wages, power, transport and equipment lease charges. In the early stage of your business you are trying to increase your customer base. Your cash inflow will not be adequate to cover the operating cost. This process will give you some indication how much additional funding is required to stay in business.


In your business plan you need to work out how much equipments are needed. What will its capital cost be? How would you finance your business equipments? Work out your outright purchase and financing option figures into your cash flow forecast budget.

Funding your business

You would have estimated how much funding is required to start after doing some cash flow forecasting.

Your personal assets or personal credit can be used. You can fund your business through an external borrowing from banks or finance companies. However, most banks are not keen on lending to new start up businesses.

It is essential to find out how much you can borrow. You need to make sure that you have the right debt profile you are comfortable with.


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